Let’s face it; you can’t compete with Wal-Mart. So don’t try. Learn about the retail industry and the tools used by successful small business operations to make a profit. Follow the best practices in retail and generate real value and reduce your overall stress.
The following articles are educational in nature and written to help the small business entrepreneur become successful in retail. The articles are lengthy in nature and so, as a reader, read slowly and absorb the information.
It is amazing how one simple formula can be so confusing to the average business owner. The formula is markup. It is defined as the dollar amount or percentage of the cost of the item added to the item to equal its sales price. Many entrepreneurs especially those in retail confuse this simple formula with margin.
A relationship exists between inventory and sales. This is referred to as ‘Inventory Turnover’ or ‘Turnover Ratio’. It is simply the number of days it takes to turn over the dollar value of the inventory. This relationship is important because as the retailer, you would want this number has high as possible.
Each industry is different in determining costs of goods sold or cost of services rendered. Retail uses two distinct methods to calculate costs of goods sold. The first is called ‘Specific Identification’ whereby each item sold is specifically identified to its recorded cost. The second method is referred to as ‘Inventory Adjustment’ format. In this method, ...
Almost all retail based operations require a Point of Sale (POS) System to properly record the customer and product activity. What is a Point of Sale System? How is it set up? What information should we get from this system? How does a small business owner benefit from this system?
There are several methods used to manage and track inventory in retail. One of the most accurate inventory management tools is the specific identification method. In this system each piece of inventory is monitored and tracked throughout the process.